VentureBeat

Updated

Folks, it’s time to stop launching video sites. We have lost count. No human mind can keep track of all the video sites out there, or the tiny nuances of sharing and hosting technology that differentiate them.

We’re wondering if Fliqz, a Silicon Valley (Emeryville/Berkeley) start-up will go down in history with the distinction of being the last video site ever to raise a round of capital. The start-up says it has raised $1 million from angels to advance its video hosting and sharing site. It doesn’t want to be a YouTube. Rather, it wants to help people manage their personal vidoes into collections, with high-quality resolution. Today, it launched a new tool called Fliqzster — which it says gives any website owner the ability to host video easily and for free.

Ok, but we’ve heard that line before, from sites like Videoegg. So we asked Benjamin Wayne, president and CEO of Fliqz, how Fliqz was different from say, Videoegg. (Btw, Kevin Sladek, co-founder of Videoegg, tells us there are 300 video sites now.)

With Fliqzster, he said, users don’t have to navigate away from the website they are currently browsing. To embed a video link, users simply select a video on their desktop, then click a button at Flizqz to receive both the permalink and a snippet of code for embedding the video into any blog, classified, webpage, or social networking site. But that’s what Videoegg lets you do. (Correction: Wayne got back to us and clarified the difference, which is important: Fliqzster is the only tool that allows any site to offer video uploading capabilities to its visitors without requiring a client download or any technical integration with the site. Vidoegg requires an initial client download, and an API code integration.)

Does Fliqz offer any new or different technology, we asked? No. Wayne is betting that execution — focusing on the customer experience — is the key to success. We are still left wondering how the site differentiates itself (Wayne says the clarification above is important).

Let us know, folks, if we’re missing anything. Wayne did say that Travelblog, a travel site, and a few other sites are using the Fliqzster tool — but they are using it for free. Fliqz hopes to make money through other means, such as revenue sharing once partner sites run ads at the end of videos. But here again Fliqz is late to the game, with Videoegg and several others already serving such ads.

Angel financing came from The Caufield Angel Fund (as in Frank Caufield, of Kleiner Perkins Caufield & Byers), Dave Witherow, former president of VentureOne, Don Hutchison, a former Excite@home exec and Marty Korman, of Wilson Sonsini. The investment was made in a couple of tranches, starting in November of last year, Wayne said.

Update: We’ve since talked with investor Dave Witherow, who rightly points out that the video market is huge, providing plenty of opportunity for smart players. He agreed that Fliqz may not want to push itself as a big-brand consumer play, but work with sites to come up with new, cool ways to implement technology on the back-end.

Two co-founders of Rapt have sued the company’s chief executive and venture capital backers, Accel Partners and Levensohn Venture Partners for breach of fiduciary duty and fraud.

Rapt is a San Francisco company that provides software to help companies find the right price for their goods to maximize profits.

It is another one of those stories we are getting familiar with in the valley — where start-up founders get washed out of their ownership holdings, while venture firms bolster their stake at more favorable terms. The case is similar to those of Epinions, Nishan Systems and Wine.com before it (you can search for stories about these cases here at VentureBeat). Rapt raised money during the boom times, but then struggled through hardships — and when the company was forced to raise more money, it did so in a way that pissed off guys who put in early sweat labor.

We’d heard about the suit a few days ago, but hadn’t gotten very far in confirming it. Now the team over at PE Week have gotten a copy of the complaint and spilled all the details. We’ve emailed Accel’s Jim Breyer again, and called Rapt, but nothing back so far.

Dan Primack of PE Wire has done a good job in summarizing it, so we won’t repeat it all here. We agree with his assessment that it is unlikely to go to trial. This is something that venture firms don’t like doing, because it can hurt their reputation as an entrepreneur friendly firm. At least in the Nishan and Epinions cases, settlements were reached. The Wine.com case rages on, however, that one concerns an East Coast firm, Baker capital, which presumably is less concerned about its reputation among entrepreneurs out here (it has also tended to invest in later stage companies). Regardless of the merits of all these suits, the cases are significant because entrepreneurs have until recently avoided suing VCs — once perceived a powerful clique that could gang together and blacklist a noisy entrepreneur.

There is also one other anecdote worth mentioning, since the two co-founders are blaming a third, Tom Chavez, who is now chief executive for effectively changing the rules of the game on them. Chavez not long ago became known for his Rapt presentation called: “It’s a whole new ballgame, and the winners are changing the rules,” adorned with pictures and references from Michael Lewis’ best-selling book, MoneyBall. Don’t mean for this to be a cheap shot; it’s just that he was giving this presentation around the same time the firm was negotiating its 2005 round of capital — the one where the two co-founders say shareholders weren’t solicited for their input on what would become a massive dilution of their shares.